Yahoo! is in talks to purchase Tumblr for estimated $1bn
Could this be the end of a good thing? It’s quite possibly so, if the news about Yahoo! being in serious talks to purchase Tumblr for an estimated $1 billion is true.
I say this because Tumblr although quite successful over the past couple of years, is still relatively small and has a start-up feeling. It’s young demographic, and quick rise to fame though, makes Tumblr an appealing choice to the aging and desperate Yahoo! - for which Yahoo!’s CEO Marissa Mayer wants in on the young user base that Tumblr has endless amounts of.
And if Mayer gets her way and purchases Tumblr, it could mark the end of a start-up and the beginning of Tumblr being part of a huge corporation with lots of red tape, which will surely stifle any sort of reactionary new innovative ideas. Hopefully David Karp and company will stay true to their roots and ideas on this one, as Tumblr doesn’t need Yahoo! to remain a success story.
All Things D says sources that are working closely on the deal state that the interest has gotten stronger.
[…] more recently, coming at the same time as Tumblr has been stepping up its efforts to raise a large funding round that could value the New York company at $1 billion. In a series of fundings since 2007, Tumblr has raised $125 million so far, at a reported valuation of $800 million.
In the latest round, one source close to the situation said Tumblr was considering “strategic” investments, which would presumably be of the kind that Yahoo! had tried and failed to do recently with France’s Dailymotion video service. Since then, Mayer and her team have looked at the ongoing deal to purchase Hulu that has many possible other bidders.
Tumblr is different from Dailymotion or Hulu, of course, in that it focuses heavily on user-generated content, largely text and photos, although there is an increasing use of video on the site.
But this puts it directly in Yahoo’s main wheelhouse, especially recent efforts to undergird its strong set of existing media offerings to appeal to a different audience and also get into the social space via consumer-based software solutions that are both elegant and easy to use.